New Report: Striking Gold: How M23 and its Allies are Infiltrating Congo’s Gold Trade

New Report: Striking Gold: How M23 and its Allies are Infiltrating Congo’s Gold Trade

Posted by Katrien Hinderdael on October 10, 2013

Gold remains an important conflict mineral in eastern Congo, with approximately 12 tons worth roughly $500 million smuggled out of the country every year. Under the guidance of former co-commander Bosco “The Terminator” Ntaganda, who is now awaiting trial at the International Criminal Court, the M23 rebel group built alliances with other armed groups and used transit routes to take control of part of the conflict gold trade, using the revenues to fund its military campaign. Current M23 commander Sultani Makenga has worked to pick up the pieces where Bosco left off. A new report by the Enough Project, “Striking Gold: How M23 and its Allies are Infiltrating Congo’s Gold Trade,” documents Makenga’s current role in M23’s networks in the gold trade and puts forth policy recommendations for addressing these illicit backchannels.

The relationships built up by M23 commanders allow the heinous armed group to smuggle gold to Uganda and Burundi, where it is sold mainly to the United Arab Emirates and then onward to international markets. Makenga has expanded on Ntaganda’s legacy and built new regional and international networks. “Striking Gold” identifies four main gold exporters that enable M23 and associated armed groups to profit from the gold trade. Ruben de Koning, co-author of the report, says,

“Some of the major official gold exporters in Uganda and Burundi indirectly purchase smuggled gold from M23 and allied armed groups in violation of the U.N. arms embargo, and without exercising any due diligence on the origin of their gold. Sanctions against these individual exporters, as opposed to companies, would help prevent sanctioned owners from merely reinventing themselves under a new company name in order to continue operations. U.S. and U.N. sanctions would make it harder for M23 and other armed groups to finance their struggle, and compel others to start mitigating such risk.”

While armed groups’ and Congolese army criminal networks’ other main sources of revenue, the 3T minerals of tin, tungsten, and tantalum, have been reduced through pressure from the U.S. Dodd-Frank financial regulation law, steps closer to the ground in Congo and the region are needed now to combat the conflict gold trade. Sasha Lezhnev, Senior Policy Analyst at the Enough Project, says,

“The U.S. government and jewelry retailers can help stem this problem at its root. U.S. envoy Russ Feingold should press Congo, Rwanda, and the Great Lakes region to finalize their regional system — the ICGLR certification process for minerals — to weed out conflict gold. Jewelers also have a responsibility to step up efforts to build a clean gold trade in Congo. They now have an opportunity to make a difference and join public-private alliances to help solve the problem and replicate tech company projects like 'Solutions for Hope.'”

Although U.N. sanctions and a finalized certification scheme would account for a significant share of the official and unofficial regional gold trade flowing from the region, acomprehensive peace agreement between Congo, Rwanda, and Uganda provides the only hope for long-term stability in the region and clean mineral supply chains.

The U.S. government should work within the U.N. Security Council Sanctions Committee to add the names of the four individuals identified above to the list of individuals and groups that already face U.N. sanctions. Imposing sanctions on individuals, as opposed to companies, would help prevent sanctioned owners from merely reinventing themselves under a new company name in order to continue operations.

U.S. Special Envoy to the Great Lakes Russ Feingold should urge Uganda, Burundi, and the DRC to take action under their respective national laws against these exporters.

The U.S. government should urge the United Arab Emirates to tighten regulatory controls for gold imports through verification of the authenticity of export documents, as well as verification of the importers of the gold.

U.N. Envoy Mary Robinson and U.S. Envoy Russ Feingold should work with the governments of the DRC, Rwanda, and Uganda to finalize the International Conference of the Great Lakes Region certification process—the Independent Mineral Chain Auditor—which is designed to investigate fraud and sanction conflict-minerals exporters.